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Why does the listed company will exist agency problems?

The primary reason for the divergence of objectives between managers and shareholders has been attributed to separation of ownership (shareholders) and control (management) in corporations. As a consequence, agency problems, or principal-agent conflicts exist in the firm.


What are the three relations between management and shareholders?

Shareholders of a corporation are the owners of the company. Management are responsible for the day to day running of the company. Management is responsible for making money for the shareholders by keeping the company's operations efficient.


What are the issues addressed in consideration of earning management and what is their relevance in pursuing shareholders wealth?

What are the issues addressed in consideration of earning management and what is their relevance in pursuing shareholders wealth?" What are the issues addressed in consideration of earning management and what is their relevance in pursuing shareholders wealth?"


What internal decision makers?

Management Shareholders Employees


What are the agency problems between shareholders and management?

faak it


How does agency problem affect the relationship of financial manager with the company?

agency problem affects the financial manager relationship with the company by means of trust. if we are going to study the principal-agent relationship (principals=shareholders ; agent=managers,CEO,BOD), the agent will stand for and on behalf of the principal with the accompany of trust and confidence by the principals, but when agency problem occur where the agents are planning to pursue some objectives that are attractive to them while not beneficial for the principal the gap between the shareholders and the management team were created...


What internal decision makers comprises?

Management Shareholders Employees


What are the essentials of management of an organization?

Reduce cost and increase profit for shareholders


Who is the principal federal official for the domestic incident management?

The secretary of homeland security is the principal Federal official for domestic incident management.


Do the directors or shareholders own the company?

Shareholders own the company as they hold shares representing their ownership stakes. Directors, on the other hand, are appointed to manage the company's operations and make decisions on behalf of the shareholders. While directors may also be shareholders, their role is primarily to oversee the company's management rather than to own it. In summary, shareholders are the owners, while directors are responsible for governance and management.


Why is shareholders' wealth maximization the main objectives of the firm?

since the shareholders are the owners of the organization and therefore seek the attainment of their objectives.that is shareholders prioritizes the increase in their invested incomes and thus employ agents who happen to be managers in order to facilitate this.maximization of the company profit increase the value of the company`s and the shareholders will be assured of a favorable dividend,thus managers must attain the objectives of their principal first otherwise the principal agent problem will arise.


When would the aided in the agency theory likely be asserted?

The agent in the agency theory would likely be asserted when there is an issue of conflicting interests between the principal (shareholders) and the agent (management). This is common in situations where the agent has more information or authority than the principal, leading to potential agency problems such as moral hazard or adverse selection.